Farnham in Surrey is traditional stockbroker belt territory – but with a twist. While peak-time trains take commuters to London Waterloo in 55 minutes, a five-minute drive west from Farnham station takes you across the county border to the countryside of Hampshire

Now a spate of new developments is bringing a different feel to pockets of this market town, 35 miles southwest of London. Developers are demolishing tired 20th-century homes on large plots to make way for grand new builds.

This transformation is concentrated in Moor Park, a semi-rural area on Farnham’s southeastern fringe, close to the North Downs Way. During the past decade around 20 substantial new homes – ranging from £1.75m to £3m and offering up to 9,000 sq ft – have been built by high-end firms including Octagon and Searchfield Homes. Savills estimates that, for the top third of properties, 30 per cent of purchasers come from London, with the bulk of the remainder being wealthy buyers seeking to upsize.

“It’s an area that’s equivalent to St George’s Hill, but further out,” reckons Rory McKenzie of Savills’ Farnham office. “We’re showing quite a lot of people round who looked in St George’s Hill, Esher, Cobham, Weybridge, and they’re seeing houses in those areas for £4m or £5m and then see the same house [in Moor Park] with a bigger garden for less money.”

An additional draw is Farnham’s schools. The town is home to South Farnham School, which consistently tops national state primary school league tables, and Weydon School, which is also highly rated. A strong independent offering includes co-ed prep schools Barfield and Edgeborough, and nearby public schools Charterhouse, Frensham Heights and St Catherine’s Bramley.

High-end new-build buyers are not short of choice. Three such homes are for sale on the residential road in Moor Park, Compton Way, alone. Among them is a 6,150 sq ft detached house on a one-acre plot, currently under construction. On sale with Strutt & Parker and Keats Fearn for £3m, the completed home will include a cinema and a double garage.

Though the redevelopment trend continues, agents report relatively sluggish sales. “It’s a case of sitting tight and waiting for the right buyer,” says Roger Wade of Strutt & Parker, adding that most eventually sell for “relatively close to the guide price”.

However, the introduction of 7 per cent stamp duty on homes above £2m since 2012 has proved “a bit of a shocker” and the threat of a mansion tax may have spooked some buyers. “I think people are sitting tight and waiting to see what happens in the [general] election next year.”

No such reluctance is evident in the town’s market for homes priced between £500,000 and £1.75m. “That’s the volume market,” says Stephen Jenkins of local independent agent Andrew Lodge. “A lot of the prices that we’re achieving now surpass summertime 2007 . . . The market dipped away in terms of activity [post-2008] but prices didn’t really, and they’re pushing on again now quite quickly. That’s pure supply and demand.” Indeed Farnham prices are now 7 per cent above their pre-crisis peak and have grown 4.8 per cent in the past 12 months, according to residential data analysts Hometrack.

Half a million pounds will secure a four-bedroom detached house north of the town centre. But it’s south Farnham’s excellent schools and proximity to the train station which attract the bulk of local upsizers and London families. Here the same budget may stretch to a three-bedroom Victorian semi.

McKenzie reports a surge in London buyers seeking the space and schools that come with a south Farnham home. “This year the amount of buyers coming out of London has risen by about 40 per cent,” he says. “A young family in a two or three-bedroom flat in Fulham whose next move is to a three or four-bed house is going to find that jump hard to make in Fulham.”

A five-bedroom detached house in Compton Way, Farnham, £3m

An alternative is to seek out the grid of leafy streets which comprise south Farnham’s desirable Great Austins conservation area. Here four and five-bedroom Edwardian detached homes command a premium. Among them is 2 Mavins Road, a four-bedroom art-deco house which Andrew Lodge is marketing for £1.65m. Its garden includes a Japanese-style cabin with a hot tub and surround sound system.

Yet it’s a mile north in Farnham’s mainly Georgian town centre that demand most outstrips supply. The atmosphere is genteel: when Morrisons supermarkets bought Safeway in 2004, the Farnham store eventually became an upmarket Waitrose, for example.

Here the market is eagerly watched by younger people and local downsizers who want to be able to walk to the shops, pubs and restaurants and prize proximity to London and its airports, says Darren Collman of estate agent Gascogine Pees: “You can get on the M3 and A3 up to London but it’s got a country market feel about the place.”

Wade suggests the market might offer up “one or two really good four or five-bed Georgian houses” a year, fetching up to £2m. McKenzie adds: “Typically if you had an open day you’d get 20 or 30 people coming in.”

A three-bedroom flat for £625,000 through Hamptons International is among the few period properties for sale in central Farnham. Facing on to the broad, mainly Georgian sweep of the town’s Castle Street thoroughfare, the apartment includes three bathrooms and – a rare commodity among central dwellers – parking for two cars.

Ultimately, whether buying old or new Farnham homeowners could all face a promising future: Savills predicts house price growth of 25 per cent by 2018.

Buying guide

● Property prices have risen 20 per cent since 2008, according to Savills

● 47 crimes were recorded in Farnham town centre in March, down from 77 a year earlier

● Fast peak-time trains to London Waterloo take less than an hour and train operator South West Trains is planning to shorten off-peak journey times from December

● The private Farnborough Airport is a 20-minute drive away. Heathrow and Gatwick airports can be reached in an hour or less

What you can buy for . . .

£850,000 A contemporary four-bedroom home in Rowledge, a popular village adjoining Farnham

£1.5m A substantial family home within walking distance of the station

£3m An 8,880 sq ft Queen Anne-style new build, complete with gym, in the upmarket Moor Park area